Deep dive: Redefining insurance through digital strategy and innovation
Modernisation is sweeping across the insurance industry, digitally transforming the way operations are streamlined, customer interactions are performed, and claims are processed.
The staunchly traditional world of insurance is shifting from manually-driven processes underpinned by legacy systems (with decades-old technologies) towards a more agile and fast-paced environment, reliant on digitisation to deliver new products, business models and services, as well as delighting customers with satisfying experiences.
Better still, technology and innovation are creating waves in this typically rigid world — paving the way for what many refer to as ‘insurtech’, technological innovations created and implemented to improve operational efficiency and bolster the entire customer experience.
According to Gartner, digital transformation is the most important goal for insurance CIOs. “Remaining resilient while adapting to changing customer and market needs will force insurers to rethink their digital platform strategy.”
Just as fintechs are pushing the boundaries of the financial and banking sector, insurtech is extending the limits by providing better value, more flexibility for customers and more personalised experiences and outcomes — and it’s all about the data.
In fact, “flexible data models are key to really driving change within the industry,” according to Endava’s head of APAC sales, Mike Young.
Endava provides digital transformation consulting, agile software development services and various automation solutions — and is on a mission to boost digital enablement in the insurance arena.
“Insurance has always been about assessing risk and the proliferation of data provides an unparalleled opportunity to accurately predict outcomes. Insurance companies that embrace this and find flexible ways to utilise data will quickly climb to the top of the industry,” he said.
What’s more, insurers that focus on value instead of price — and use the power of technology — will be the ones that reposition themselves as something more than just insurance brokers, according to Young.
“The most effective way to achieve this is through technology innovation. Instead of just being a vehicle for risk exchange, insurers will start using technology to market themselves as something that’s good for the customer and for society as a whole.”
Indeed, it’s all about “reimagining the relationship between people and tech,” and using the power of data via digital enablement to personalise experiences, Young said.
“Digital transformation is personalising an industry that’s based on statistics and averages.
“Some examples include predictive analytics and how information can be tailored to place the customer at the centre of interactions. Undoubtedly, digitalisation can deepen the industry’s understanding of its customers and enable a better experience for all.”
Digital technologies making their mark on the sector include artificial intelligence (AI); machine learning (ML); low code; automation; Internet of Things (IoT); social media data; telematics; chat bots; and drones.
Additionally, the launch of CDR (Consumer Data Right) sector by sector, and already rolled out in banking and energy, is expected to modernise the insurance space — giving consumers more control over their data.
Find the right partners
While the insurance industry is no stranger to disruption (and had to quickly pivot and adapt due to the global pandemic), many players are still dragging their heels, due in large part to the fact that certain data platforms and tools fall short when it comes to capabilities or regulated processes.
So, are the majority of insurance players on the same page? Not even close.
The insurance sector has lagged behind most other sectors in its digital transformation.
“A lot of the insurance industry has failed to keep up with the rapid digitisation of other industries. However, this can’t remain the case forever. As new technologies become increasingly prevalent, the risks that insurance companies are covering will evolve, forcing a rapid evolution of the industry,” Young said.
The key is to find the right partners to help digitise core capabilities, deliver more digital self-servicing tools, and create personalised products and experiences for customers.
“A number of programs that have tried to be done in house, either fail or take three times the time and budget to deliver half the functionality.
“Unless you’re an insurance company that was born digital, there’s a high likelihood that there’s a lot of legacy technology that will need to be updated and modernised in order to modularise the services, open them up to third-party partners, and sort out the underlying data model. Historically, insurance companies have a poor track record of delivering large transformation programs.”
Specialist partners are also crucial to insurers embarking on the digital transformation journey – given the massive skills shortage wreaking havoc right around the globe and closer to home in Australia.
According to the Tech Council of Australia, Australia will need one million people in tech jobs by 2025, meaning around 260,000 more people will need to enter the Australian tech workforce before that date.
“Finding a partner that understands the business goals you’re trying to achieve is critical in any digital journey. For insurers, they’re facing the need to transform their own technology while adapting to the changing technology of the companies and consumers they cover. This change of two fronts demands a nuanced understanding of the challenges faced by the industry,” Young said.
“It’s evident that valuing customer experience, assessing supporting data, developing the right technologies, and repositioning insurance as a partnership are important concepts for industry leaders to harness in order to drive growth.”
To read about how Endava can position your business at the forefront of innovation, see here: https://www.endava.com/en/Industries/Insurance